Ripple has launched multisignature capability on the Ripple Consensus Ledger.
The feature allows users to request cryptographic signatures by more than one user – a device or institution – to validate a transaction. The idea is that bad or malicious actors would have to breach multiple machines to transact on one user's behalf, Ripple said in a blog post.
Multisig capability will also be available to banks that implement Ripple's Interledger Protocol, which lets banks require cryptographic signatures to prevent individual bank employees from transferring customer funds on their own. Ripple revealed Interledger in October, saying it would offer banks the same speed and cost benefits as the three-year-old Ripple network but with improved privacy and scalability.
In a separate blog, the San Francisco-based distributed ledger technology startup called the multisignature offering a more "robust and distributed security architecture for banks" and cited the February cybertheft of $81 million from a Bangladesh Bank account at the Federal Reserve Bank of New York.
“The bank heists in Bangladesh and around the world have demonstrated that the weaknesses that exist today at the periphery of payment networks are partly due to outdated single signature methods,” Ripple said in the blog post. Features like “multi-signing, are not available in traditional systems like Swift’s. Blockchain technology delivers a more robust and distributed security architecture for banks.”
Ripple did acknowledge the existence "to some extent" of multisig capability in traditional banking.
"The difference with distributed financial technology is that the rules are enforced by" the Ripple Consensus Ledger, it said. "This creates a better safety net so that even if banks’ internal controls break down, they’re more likely to catch fraudulent transactions."
